KentuckyHB 6772026 Regular SessionHouse

AN ACT relating to energy production and byproduct management.

Sponsored By: Jim Gooch Jr. (Republican)

Became Law

CoalEnergyEnvironment And ConservationFuelMinerals And MiningOil And Natural GasPollutionReports Mandated

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Bill Overview

Analyzed Economic Effects

11 provisions identified: 1 benefits, 0 costs, 10 mixed.

Local control and new plant setbacks

The law sets clear distance rules for power plants. Stacks and wind turbines must be at least 1,000 feet from a property line, and all generation or storage structures must be 2,000 feet from neighborhoods, schools, hospitals, or nursing homes. Wind turbine hubs cannot be higher than 350 feet. Local planning and zoning rules on height, decommissioning, and setbacks control over state rules, except the state’s minimum decommission bond still applies. An exception removes the 1,000‑foot stack boundary rule for former coal plant sites that burn on‑site waste coal. The board can allow closer siting if it finds the project still meets the law’s goals.

Certificates and fees for lines and pipelines

You must get a construction certificate before building a nonregulated electric transmission line or a CO2 pipeline, and pay an application fee set by rule. The board can set, and if needed supplement, application fees and deny an application for nonpayment. Applications must include detailed route maps, property lines and owners, and distances to neighborhoods, schools, and parks (one mile for lines; 1,000 feet for CO2 pipelines), and follow engineering standards. The board may hire a consultant and charge the cost to the applicant. The board must decide line applications within 120 days, or 180 days if a local hearing is held, and must hold a local public information meeting on a CO2 pipeline if at least three county residents request it.

CO2 consent, pooling, enforcement, and permits

Sequestration projects generally need written consent from at least 75% of pore‑space owners; the cabinet can pool the rest and set just pay, with limits on disturbing nonconsenting surfaces and required public notice for unknown owners. The cabinet gets strong enforcement tools, including orders to stop injections, closure for danger or missing financial assurance, forfeiture of bonds after notice and appeal rights, civil and criminal penalties, and recovery of enforcement costs. The cabinet cannot permit applicants who misstate facts, leave violations uncorrected, have control persons tied to forfeitures, are linked to unresolved forfeitures, or are in violation of listed laws; eligibility can return after problems are fixed or on appeal. Class VI permits cannot be transferred without cabinet approval of a joint application, payment of a fee, and new financial assurance. The law repeals the prior geologic CO2 storage statutes and replaces them with this framework.

CO2 storage ownership and long-term handoff

CO2 storage operators own the injected CO2 and are liable for damage until the cabinet issues a completion certificate. The cabinet may issue a certificate about 50 years after injections stop, or sooner by rule, after public notice, a hearing, and compliance checks. On that date, ownership shifts to the Commonwealth with no payment; the state manages and monitors the site using the trust fund and defends and indemnifies pore‑space and surface owners up to the fund balance. Operators must also pay a fee on each ton of CO2 injected; the cabinet publishes an annual trust fund report each December 31.

Fees and financial safeguards for CO2 storage

Operators must post financial assurance for cleanup, well plugging, post‑injection care, and emergencies. They must update cost estimates yearly and fix any shortfall within 60 days. The Cabinet reviews permits at least every five years and can require added protections or more financial assurance. Applicants and operators pay application, annual, and completion‑certificate fees set to cover program costs. Fees flow to an administrative fund for reviews and oversight. A separate trust fund pays for long‑term monitoring and cleanup, including after completion. On request, the Cabinet certifies stored CO2 amounts for credits or trading, for a fee.

New rules to build CO2 storage sites

The law creates state rules for underground CO2 storage. You must have a Class VI permit and a Cabinet drilling permit before you build or operate. Applications must include consent from at least 75% of pore‑space owners, and you must show legal rights to use 100% of the pore space and access the surface before review starts. You must publish notice and allow at least 30 days for public comment, and serve notice to affected owners. The Cabinet decides administrative completeness in 60 days and issues a final decision within 365 days after the application is complete, pausing while you fix issues. A permit issues only if water is protected, monitoring and boundaries are set, nonconsenting owners are justly paid, and you show financial responsibility. The Cabinet sets drilling and construction standards and files the permit and a land survey with the county clerk.

Plant transfers and post-build enforcement

When a plant is sold, the buyer must file within 10 days to accept decommissioning duties and adopt or replace the bond; a bond must be in place on the transfer date and kept current every five years. Sellers stay liable until the cabinet accepts the buyer’s filings. Any condition that requires board approval for a transfer after construction is complete is void, but filing and bond duties still apply. Certificate rights cannot be transferred unless the board finds the buyer has a good environmental record and the capacity to meet obligations. After a plant is built and starts selling power, the cabinet secretary—not the board—enforces approval and mitigation conditions. Certificate holders must also file notices of construction completion, commercial operation, and any ownership change, and notify lessors and local officials within 10 days with the buyer’s contact info.

Power plant cleanup plans and bonds

Applicants must include a decommissioning plan to remove above‑ground and underground parts (unless a landowner asks to keep them) and return land to a similar state. A bond or similar security is required at least equal to the net present value of decommissioning or a higher local amount, must name required beneficiaries, be from a strong insurer, and allow landowners or the cabinet to draw on it. The bond must be filed by the start of construction and updated at least every five years; the secretary also reviews and may raise the bond or update the plan at least every five years. The party doing decommissioning keeps salvage proceeds; any extra after bond draws goes to the state monitoring and enforcement fund. Discarded solar panels or wind parts must be removed within 90 days unless the secretary extends the time.

Stronger applications and reviews for plants

New plant applications must include detailed site maps within two miles, proof of public notice, local‑rule and setback compliance, public outreach, economic and transmission studies, any major environmental violations, required assessments, and a decommissioning plan. The board must decide a complete application within 120 days, or 180 days if a hearing is requested. Replacing a facility with a like unit, or repairing or retrofitting it, does not count as new construction. The board weighs scenery, property values, noise, economics, grid reliability, setbacks, mitigation, compliance history, and wind‑specific lighting and flicker limits. It may also consider Kentucky’s coal‑use policy, but the plant must still meet all listed environmental and utility laws.

Public meeting rules for power projects

When asked, a merchant power developer must hold a public meeting in any county where it may buy land within 30 days. The meeting must include knowledgeable staff and explain the project. The developer must post public notices and mail notices to owners in the project and to adjoining owners at least two weeks before the meeting. It must also notify listed state agencies on or before the meeting date.

Property rights and coordination for CO2 storage

CO2 injected under a Cabinet Class VI permit is not a pollutant, and such facilities are not a public nuisance. Oil and gas and storage operators must share permit filings. The Cabinet holds related applications 15 days for objections and, if needed, sets a hearing within 10 days. It can change permits and split extra costs. Money owed to unknown pore‑space owners goes into a trust; after seven years from the first injection, it goes to the surface owner, or to the state trust fund if the surface owner is also unknown. The law keeps existing common‑law rights between mineral and pore‑space owners. The Cabinet may make agreements with other states for cross‑border projects.

Sponsors & Cosponsors

Sponsor

Jim Gooch Jr.
Republican • House

Cosponsors

Jason Howell
Republican • Senate
J.T. Payne
Republican • House
Robby Mills
Republican • Senate
Wade Williams
Republican • House

Roll Call Votes

All Roll Calls

Yes: 197 • No: 28

House vote • 4/1/2026

passed

Yes: 61 • No: 28

Senate vote • 3/31/2026

3rd reading, passed

Yes: 38 • No: 0

House vote • 3/9/2026